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The Impact Of Globalization On Business Enterprises

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The Impact of Globalization on Business Enterprises

Janice New

University of Phoenix

Forces Influencing Business in the 21st Century MBA/501

Dr. Genny Turano

Situation Analysis and Problem Statement

American Communications is a telecommunications industry that is having financial problems and problems competing with cable companies, and other telecommunications companies. The company needs to find ways to cut cost so they can compete with other companies. This paper will outline challenges, opportunities, and dilemmas that may arise for American Communications due to the decision to outsource call centers.

In order for American Communications to survive the company needs to frame the correct problem, identify the company's goals, identify challenges, and possible dilemmas that may arise. American Communications must develop a plan to compete with other companies, provide good customer service and make a profit. The only way this can be accomplished is condition and state of the company must be analyzed and outlined correctly.

Situation Background (Step 1)

American Communications is a telecommunication company that is on the verge of going under due to competition from other companies, which is resulting in a lower profit margin. This is causing concern among the stockholders. The stockholders are concerned that the company will not be able to rebound from the lost of profit caused by services offered by other intercommunication companies and the cost of labor for call centers.

American Communications has decided to try to cut cost to increase their profit margin. Profits will be used to add new services to attract new customers. The company has decided to cut cost by outsourcing their call centers.

Issue Identification

There are several issues facing American Communications but the one that this paper will focus on is outsourcing call centers. American Communications will face several issues or opportunities due to this decision among these are analyzing trade theories, barriers that may arise and risks that comes with this decision. Each one of these must be analyzed and handle in a professional and appropriate way.

First trade theories need to be addressed among these are comparative advantage, free trade and protectionism. The company needs to look at these theories and determine how they affect the opportunity of outsourcing. Comparative Advantage is said to exist when a country has a margin of superiority in the production of a good or service and their opportunity cost remains low. (Tutor2u 2006) Another thing that needs to be considered is free trade; free trade is said to exist when there are few barriers to international trade between countries. (Tutor2u 2006) Protectionism is barriers that hinder international trade of services or goods. (Tutor2u 2006) After identifying and understanding each theory American Communications must determine if any of these will affect their plan of outsourcing call centers.

First comparative advantage is an argument for outsourcing call centers, India offers lower labor cost, which in return will decrease cost for the company and will increase profits. Free trade is also a plus in this situation there are not many barriers for outsourcing call centers a number of companies are already doing this. Outsourcing of call centers to India works. Global Communication can research other companies that are doing this and see the benefits of outsourcing.

Risks of Doing Business Overseas

Call center outsourcing is not a new phenomenon but it has evolved and come a long way from its origins and is in a sense entering a more collaborative era, an era treats the center as a valuable competitive weapon. As call center outsourcing has become more widespread and more important to customer relationships, companies and vendors have learned a number of lessons about how to best approach the practice. Among these are establishing rigorous governing processes, balance cost control with customer experience requirements, and approach off shoring with care, thinking long-term, and focusing on employees. (White 1995) Each one of these lessons mentioned will assist American Communications in successfully outsourcing call centers.

Establishing rigorous governing processes is the first step outsourcing agreements should be detailed enough so that both parties have and absolutely clear idea of their responsibilities and are working with the same expectations in terms of performance and results. Governance processes should regularly monitor performance, acquire input from clients' business managers, and establish regular interactions between the two companies management with the goal of ensuring that the call center operation continues to deliver what the client needs in a changing environment.

Balancing cost with customer experience requirements is a must, outsourcing is used to save money, and to increase profits, but in order for this to become a long-term benefit the staff at the call centers must be trained to answer the calls in effectively and quickly. If the call center staff can do this it will keep customers and assist the company in attracting new customers.

Outsourcing call centers must be approached with care and a great deal of consideration. Outsourcing call centers to overseas facilities can clearly reduce per-call costs, but when it comes to inbound customer-care centers, outsourcing has the potential to create problems due to differences in language, culture and training. Such problems are not reason to discard outsourcing but they do require special consideration and a full understanding of the risks as well as the benefits.

Thinking long-term is a must when considering outsourcing. Remembering that business is ever-changing and ensuring that call centers infrastructures will provide the flexibility to meet the changes is a must. Long-term things that need to be considered are: is there sufficient remote backup capacity in case of a natural disaster, is data protected adequately, can the call center handle sudden changes in workload. If all these are considered outsourcing can be successful.

Focusing on employees and customers must be a goal. The connection between satisfied employees and satisfied customers is well established. (White, 2006) Unhappy call center staff



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